ipl-logo

Advantages Of Single Product Economy

1250 Words5 Pages

Less developed countries, such as African countries, largely depend upon single primary commodities for economic growth. There are several drawbacks to such a reliance on a primary product for the growth of the economy (Stein 1970: 607). Such economies are not able benefit from comparative advantage, due to the inability to direct resources towards other sectors, such as industry, with a greater potential for growth (Stein 1970: 611). According to Nafziger (2006: 611), less developed countries are “vulnerable to declining terms of trade due to the inability to shift resources to accommodate shifting patterns of comparative advantage”. Additionally, manufacturing exports are produced at a much faster rate than primary products. Therefore, through the reliance solely on primary products, African economies do not experience such growth, as it would if it were also diversified into the manufacturing sector a well (Stein 1970: 615).

Another drawback of a single primary product economy is that the state would import the products that it does not produce domestically. As such, import requirements increases faster than their export of primary products (Kaldor 1964: 491). Furthermore, if any competitor decreases their price in a primary product, it forces other producers to do the same leading to a devaluation of the product affecting growth (Kaldor 1964: 499). Furthermore, Kaldor (1964: 491) states that in some of these African economies would depend on external aid to finance

Show More
Related

  • What Are The Raw Materials Dbq

    1101 Words  | 5 Pages

    harvesting their raw materials was geopolitical in nature, as nations sought to increase their standing and become a world superpower. Another document that displays this is Document E, a graph that displays the money made from imports and exports from Africa, South of Sahara, in the year 1854 and in 1990. Looking at this graph, in 1854, imports and exports from and to Africa were considerably smaller compared to 1990. The overwhelming column for 1990 shows that Europeans exported more goods more often from Africa over time. Over the span of 136 years, Europeans have obviously have had an interest of exports of raw materials found in Africa as seen in this document, which brought them more than 20 million pounds in 1990.

    Read More

  • Ap World History Dbq Essay

    853 Words  | 4 Pages

    The distinctive Revolutions led to an economic revival among its manufactures and solidity. A. “Industrialized countries required a steady supply of raw materials from less developed lands” (Littell 299). B. “Industrialized countries viewed poor countries as markets for their manufactured products” (Littell 299) IV. An imposing quantity of political prospects followed from the Revolutions that established rising opportunities as a community.

    Read More

  • Eco 372 Week 2 Pestle Analysis Of Chile

    676 Words  | 3 Pages

    (INTERNATIONAL MONETARY FUND, 2014) A strong and stable macroeconomic policy has led to a growth rate of 5.2 percent in the period of 2000 to 2010 and is still growing with a rate of 6.2 percent in 2013. Such improvements in macroeconomic performance over the last decade can be seen as a result of the Highly Indebted Poor Countries debt reduction initiative in 2005 and also improved revenue mobilization. Consequently, Zambia in 2011 was included in the lower-middle income country, a status it lost in the 1980’s. Investment in mining sector and the high price of copper in the international market has led to recovery of nation economy.

    Read More

  • Rich Nation, Poor Nation

    915 Words  | 4 Pages

    In Chapter 1, Rich Nation, Poor nation of The Economics of Macro Issues, the author first identifies the common misconception that economic advantages are predetermined by the natural resources made available to that country. Economic growth is developed by political and legal institutions. Stable institutions are detrimental to the success of the economy because they provide a sense of security for investing. These investments raise capital stock and promote long-term growth which leads to a higher standard of living.

    Read More

  • African American Imperialism Analysis

    653 Words  | 3 Pages

    In another analysis of this debate between good and bad imperialism, it is claimed that Africa gained a “Technical advance--a significant technical advance in the modern period has been, quite simply, the introduction of new crops to many African regions. Other technical advances have included agricultural techniques, improved transportation and communication, etc. Most modern technical advance seems to have resulted from diffusion to Africa of innovations made elsewhere, rather than from research and development in Africa led, for instance, by colonial governments” (Manning). The European and Western businesses also brought more commerce to Africa, “European firms and governments invested in such enterprises as railroads and ports in Africa. The investment brought wages to workers, and better transport brought better prices to African producers and consumers” (Manning).

    Read More

  • Pros Of Industrilization

    159 Words  | 1 Pages

    Industrialization was a revolution for everything. It cause steel to be made for railroads, etc. The industrialization was a huge leap for us. We are no longer in the dark ages. Bc of industrialization we are where we are in the world now.

    Read More

  • European Imperialism Dbq Questions And Answers

    510 Words  | 3 Pages

    A plan the Europeans created was to mineral products from africa and “send raw materials to feed European factories. Raw materials were exported to Europe, who would then re-export them to Africa as final products, sold at high prices. Africans could not afford to pay for these products”(Effects of European Rule). This way Europeans would make products at lower prices and sell them for way higher prices. Europeans would make so much more money selling them in Africa for high prices because Africans would need the food and products and would have to buy them for a lot of money.

    Read More

  • European Imperialism In Africa

    520 Words  | 3 Pages

    Africa has an immense supply of raw materials that many countries wanted to take control of. After suffering a long economic depression and trade demonstrating a growing deficit, Great Britain and several other European nations were offered an open market deal with Africa that would result in a surplus of trade, but lead to an unfavorable balance; a market that bought more than it sold. European nations acted on the idea that they needed to manage areas for investing in their capital. A surplus of this was more profitable invested overseas where cheaper labor, abundant raw materials, and little to no competition made it

    Read More

  • European Imperialism Dbq

    208 Words  | 1 Pages

    Consequently, these countries now controlled the resources found in their respective colonies. European industries, especially those of food, textiles, and automotive, significantly benefited from Africa’s plentiful cotton, palm oil, sugar, metals, rubber, and so on (Document D). Several countries, such as Great Britain, would profit over $20 million yearly in exports following African colonization (Document E). Gaining abundant resources through the colonization of Africa was essential for European industries to survive economically. Africa’s resources were the principal factor that drove European

    Read More

  • The Pros And Cons Of Market: A Competitive Market

    797 Words  | 4 Pages

    When there is a large number of sellers and a large number of buyers in a market, that market is regarded as a perfectly competitive market or industry. In a perfectly competitive market, a single firm cannot dictate the pace and the selling price (Khan Academy, n.d.). In other words, one firm cannot set the prices and the competitors are obligated to market prices. What is fascinating about a perfectly competitive industry is that barriers that prevent new firms from entering the industry are flexible; that means, there are minor barriers of entry as well as little or no barriers to exit (Rittenberg & Tregarthen, 2009). In view of this, the following items will be classified as a perfectly competitive market and a non-perfectly competitive market.

    Read More

  • The Second Industrial Revolution: New Imperialism

    1410 Words  | 6 Pages

    Each country sought an edge in expanding their economic prosperity against others. Europe did not have the abundance of raw materials, such as rubber, manganese, palm oil, and cotton that African intermediaries possessed. In order to overcome these arduous challenges, country’s strong-armed themselves into the African continent to obtain the necessary resources for the production of goods. Furthermore, European countries, in order to avoid intermediaries and the stagnation of their lucrative expansion, imposed an imperialism of free trade. Instead of directly controlling the

    Read More

  • Ghana Curse

    1089 Words  | 5 Pages

    These resources become a curse when they do more harm than good. This curse may come in the form of slow growth, a decline in her tradable sector due to the appreciation of her currency among others. In most cases, the new opportunity found is embarked upon at the expense of existing opportunities (goods that are exported by a country). Most authors argue that countries that do not have an abundant natural resource perform better than countries with an abundant natural resource. A reason for this argument is the presence of the Dutch disease in those countries.

    Read More

  • Why Is Industrialization A Good Thing For Society

    720 Words  | 3 Pages

    For thousands of years following the rise of civilization, most people lived and worked in small farming villages. However, a chain of events set in motion in the mid-1700s changed that way of life for all time, this called the Industrial Revolution. The Industrial Revolution started in Britain, but it instead was a long, slow, uneven process in which production shifted simple hand tools to complex machines. While some might argue that Industrialization had primarily negative consequences for society because for example, it was actually a positive thing for society. Industrialization’s positive effects were railroads, cars, and a variety of jobs.

    Read More

  • Advantages Of Token Economy

    1338 Words  | 6 Pages

    Token economy Introduction A token economy is a system of behavior built on the systematic reinforcement of aimed behavior. It includes rein forcers which are symbols or tokens that can be used for other rein forcers. It is based on the principles of operant conditioning and can be located within applied behavior analysis. It can be used with children and adults in applied settings however they have been modelled with pigeons in laboratory settings.

    Read More

  • Mercantilism In Africa

    2052 Words  | 9 Pages

    Another things that made African states not to benefit most in the trade is that, they export raw material or minerals because they lack means to process those raw material into finished goods and services. Therefore, those raw materials that are being exported, the African states import them back as manufactured and finished goods and they import them at higher cost compared to the profit they received when exporting

    Read More

More about Advantages Of Single Product Economy

Open Document